Chile and Brazil are two of the youngest countries to have concluded negotiations for a free trade agreement and, according to some sources, the agreement will be signed in a few weeks. The two nations spent four rounds of negotiations in which representatives worked to conclude a bilateral agreement to promote trade between the two countries and even to conclude trade with other Latin American nations. The new agreement will complement the agreement already reached between Mercosur and Chile, which will transfer hundreds of millions of dollars of goods between Chile and Brazil, which will stimulate both economies. The agreement will help regulate and boost trade in several key areas, the ministry said. Chile supplies Brazil with products such as copper cathodes, salmon and wine, while Brazil supplies meat, vehicle carcasses and steel products made in Chile. Brazil and Chile held the first round of negotiations on a free trade agreement in Brasilia on 6 and 8 June 2018. The new agreement will address issues such as services, e-commerce, facilitation, labour issues, environmental issues, trade and sex, as well as SMEs. The second round of negotiations on a free trade agreement to complement the Economic Complementarity Agreement (AEC) No. 35 was held in Santiago, Chile, from 7 to 10 August 2018. The third round of negotiations ended on 14 September 2018 in Brasilia. For the first time, Mercosur and the Pacific Alliance will work together and strengthen some of their shared values to stimulate business and promote investment and trade.
Although the new agreement has not yet been concluded, trade between Chile and Brazil has never been higher – last year, the two countries traded more than $8,500 million in goods and services and $7,210 million was traded in the first nine months of 2018. Chile is the first Latin American country to have sealed a free trade agreement with China (2005) and to work with Beijing since early 2007 to extend the agreement to services and investment. Other agreements in this regard were reached during President Bachelet`s visit to China in April 2008. The service contract came into effect in August 2010. The agreement is in addition to the Economic Complementarity Agreement (ACE 35) signed in the 1990s by Chile and the Mercosur (Southern Common Market) countries that govern our merchandise trade. The agreement includes next-generation disciplines such as telecommunications, e-business, trade in services, the environment, labour, sex, M2, trade cooperation, technical barriers to trade, public procurement and competition policy, trade facilitation, good regulatory practices and temporary market entry for entrepreneurs. Wednesday`s agreement removes the latest tariffs between the two South American economies. The majority has previously been reduced as part of a complementary agreement between Chile and the Mercosur bloc countries. The Mercosur agreement – a trading bloc between Argentina, Brazil, Paraguay and Uruguay – has been in place for several years, but a new agreement will contain new sections to continue to unify the agreement and create a single trading bloc with a common goal. An updated Mercosur will also include telecommunications, the removal of trade barriers, intellectual property rights, a chapter on the promotion of small and medium-sized enterprises and much more.